Editor's Note: This story has been changed from the print original to correct Neil Kadisha's former role at Qualcomm Inc.
Neil Kadisha, one of the Business Journal’s Wealthiest Angelenos, has been ordered by a state appellate court to pay $94 million to a widow whose trusts he allegedly mismanaged.
However, the venture capitalist maintained to the Business Journal last week that he did nothing wrong and vowed to take the case to the state Supreme Court if necessary.
In late September, the 2nd Court of Appeals upheld most parts of a 2006 trial court judgment against Kadisha, a former board member of Qualcomm Inc., who was sued by the widow of a late friend.
A Los Angeles Superior Court judge had ruled that beginning in 1988, Kadisha used trust funds of Dafna Uzyel and her children to buy real estate and Qualcomm stock, earning them millions but also secretly enriching himself in the process.
Most of the appellate court’s award stems from Kadisha’s sale in 1992 of some Qualcomm shares, which he allegedly cashed out to give himself a loan. He was ordered to pay for lost profits based on the value of those shares in 2000, when the trusts were terminated.
Still, Kadisha said that his investments on behalf of the family in Qualcomm made the trust more than a 20 percent profit annually for 12 years.
“This ruling will scare any individual from becoming a trustee, especially as a favor,” said Kadisha, who became involved because he was a friend of Uzyel’s late husband. “Nothing is missing. I made an investment in Qualcomm which has made this trust so much money, and now I’m being blamed for selling some of it too soon and not selling it at the peak of the market.”
The appellate court disagreed, saying that “Kadisha breached his duty of loyalty by selling the shares solely for his own benefit and without regard to the interests of the beneficiaries.”
The appellate court reversed some awards, including $13 million in attorneys’ fees, but added others, including about $20 million in prejudgment interest fees, for a final award calculated at $94 million, according to a release issued by Uzyel’s attorney Samuel Krane of Encino-based Krane & Smith.
The law firm did not respond to calls for comment.
The ruling restored the judgment closer to its original total of $100 million plus attorneys’ fees, which had been reduced to $77 million including attorneys’ fees.
In May, the Business Journal ranked Kadisha as the 38th wealthiest resident in Los Angeles, and estimated his net worth at $860 million. He is the managing partner of Omninet Capital LLC in Beverly Hills.
The 2nd District appeals panel was scheduled last Friday to consider a petition for a rehearing. Kadisha said he intends to appeal the case as far as it can go.
“With this ruling basically they will set aside causation and damages for a legal award and they want to do it just based on hindsight,” he said. “That is why it’s a subject worthy of the Supreme Court of California.”
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